Weird places people hide cash around the home

Weird places people hide cash around the home

It was revealed this week that for every Australian that there are 10, $100 notes in circulation. You might be thinking, so what? But when you consider that there are only seven of the more commonly seen $20 notes for each Aussie, it becomes a bit of a head scratcher.

But a former Reserve Bank of Australia official, Peter Mair, thinks he’s found the reason and that reason is old people. That’s right; senior citizens hiding, burying and stuffing their mattresses full of cash to make sure they qualify for the means-tested pension.

“For those people looking to qualify to get the pensioner concession card and to draw a part-pension it makes a lot of sense to manage your assets in a way that converts some into anonymous cash,” Peter Mair told ABC Radio.

He also estimates that the average pensioner couple could be hiding up to $50,000 worth of undeclared $50 and $100 bills. And for one older timer on the radio, that figure is right on the money.

“$65,000 went into my garage, well I won’t say where but it’s there in $100 and $50 notes,” the caller, identified as Brian, told radio station 3AW.

Top hiding places

So where do people like to squirrel their money away? A recent poll conducted by British comparison site Confused found that the bedroom is the most popular hiding place for cash, with 30 percent of survey respondents admitting they kept cash stashed under the mattress or in the underwear drawer.

A fifth used a piggy bank or money box and about 7 percent of people opted for extra security by keeping the money hidden under their floorboards.

Earlier this month a California man made headlines after he passed away, leaving an estimated $US7 million in coins hidden in his house and garage. Authorities said some of the coins were disguised in boxes marked “books”, while others were found wrapped in aluminium foil and stored in ammunition boxes.

Meanwhile, a Sydney man who hid $15,000 in cash in his oven was left with a colourful mess after his wife turned it on earlier this year.

“Some people, especially of an older generation may not trust the banks as much as the rest of us do and that’s a perfectly legitimate reason [in their minds] for hiding cash away from prying eyes,” financial commentator Tom Elliott told Ten’s The Project.

For whatever reason you may keep large amounts of cash stored at home, be aware of the risks involved. Some home insurance policies may only cover cash stolen from the home up to a certain amount, if any. If your stash exceeds this figure, then you may not have a leg to stand on.

For those Australians needing reassurance that their money is safe with the banks, Treasurer Wayne Swan said this in a statement last year: “We have one of the most generous and secure deposit insurance schemes in the world”.

That’s because the Australian Government guarantees bank deposits of up to $250,000 held in Australian-licensed banks, building societies and credit unions. That’s slightly less than the equivalent of a $288,000 deposit scheme in the US, but it is more than double programs in Canada and Japan. Britain protects the equivalent of $167,000 in savings.

While a deposit account may not be as creative a hiding place as an oven or your floorboards, a savings account or term deposit is a secure place to stash your cash. And unlike the mattress, it could help your lump sum to grow!

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Learn more about savings accounts

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.